“CCEP reiterates its view that it believes the value of its offer is full and fair. CCEP has no present intention of changing the terms of its offer, nor does it see any reason to do so in the future, but it does reserve the right to do so,” it said.
It’s unclear when the footnote was added to the online transcript (it wasn’t in the transcript on October 27) but mergers and acquisition lawyers said it cleared the way for CCEP to lift its offer price to win over shareholders who claim the $12.75 a share bid is too low.
Despite the qualification, some Amatil investors have sold shares below or at $12.75, possibly in the belief the offer would not be raised. Other investors have been buying at prices 45¢ above the current offer in the expectation of a higher bid.
CCA shares have been trading above the offer price (which will be reduced by the value of Amatil’s final dividend) since mid-December, and reached $13.25 on Tuesday.
“I don’t think the statement is binding, I think they are free to increase,” said one lawyer, who declined to be named.
“If a party immediately corrects that statement and the market hasn’t traded in any material way on the back of that statement, it’s not binding under truth in takeovers.
”The fact that between October and now there’s been zero reporting of the fact of that statement or repetition of that statement, you’d be hard-pressed to say they’re bound not to increase [the offer].”
Another lawyer said CCEP would have had 24 hours under ASIC guidelines to qualify its “full and final” statement – any longer and it would have been bound to not raise the offer price.
“They have been well advised [to add the footnote],” the lawyer said. “You can’t say something is final unless you say you expressly reserve the right to change your position on it, and it sounds like that’s what they did,” he said.
One investor who bought shares in December around $12.75 said the “full and final” comments were made when the indicative proposal was put forward in October and had not been repeated when Amatil and Coke Europe signed the implementation deed in early November.
“Hence, I do not think the ‘final’ language is binding here,” the fund manager said.
Four Amatil shareholders – Dublin-based Setanta Asset Management, Martin Currie Australia, Antares Capital, and Pendal Group – previously said CCEP’s offer was opportunistic and the price undervalued the business.
However, sources said all four fund managers had recently reduced their shareholdings, selling shares close to the offer price, with Martin Currie and Antares believed to have exited completely.
Lawyers said Coke Europe was “walking a line” trying to create the expectation it would not lift the offer while reserving the right to do so.
The truth in takeovers policy requires people and companies to be bound by public statements in relation to a takeover. The policy refers expressly to takeover bids, but ASIC and the Takeovers Panel regard it as extending to schemes of arrangement.
Lawyers said if CCEP raised the offer price, shareholders who had sold their stock in the belief the offer would not be raised might be entitled to compensation.
“If the reservation was ineffective, that’s the most likely outcome,” one said. “The Takeovers Panel is pretty strict on this stuff.”
In February 2018, Westfield suitor Unibail-Rodamco was forced by ASIC to issue a statement reserving the right to increase its $30 billion bid after former chief executive Christophe Cuvillier told analysts the French property giant would “not move the offer price”.